"MSCI excluding companies that hold Bitcoin is like taking oil out of Chevron"…Strategy CEO criticizes

Global index provider MSCI's consideration to exclude companies that hold large amounts of digital assets (cryptocurrencies) such as Bitcoin from indices prompted a strong backlash from Strategy. They argue that excluding specific industry groups based on asset composition weights is a measure that distorts industry structure.

On the 11th (local time), according to Cointelegraph, MSCI has been discussing with investors since last October a plan to exclude digital asset financial companies (DAT) that hold 50% or more of their total assets in digital assets from index composition. In response, Phong Le, chief executive officer (CEO) of Strategy, said in an interview with Schwab Network, "MSCI's approach is a wrong judgment and distorts the industry."

Le cited examples of oil company Chevron, timber company Weyerhaeuser, and real estate company Simon Property Group, noting, "These companies also have most of their assets based on their respective industry assets but are not excluded from indices." He said, "This way of picking winners and losers at this stage hinders innovation."

MSCI explained that it has received opinions that some DAT companies show characteristics similar to investment funds. Le rebutted, "We are an operating company founded in 1989 and listed in 1998, and legally and structurally 100% an operating company," arguing that MSCI has misclassified them. He added that he has served as chief financial officer (CFO) since 2015.

On the same day, Strategy sent an official letter to MSCI claiming the proposal could operate to exclude digital assets as an asset class and could undermine the neutrality of index providers. Strategy warned that if the proposal is implemented, virtually all companies holding digital assets could be treated unfavorably.

MSCI's consultation runs until December 31 and the final conclusion will be released on January 15 next year. If changes are confirmed, they will be applied from February next year. Charlie Sherry, Head of Finance at BTC Markets, said in an interview with Cointelegraph last month, "MSCI initiates such consultations only when it judges the likelihood of implementation to be high."